Indian early-stage start-up investor Venture Catalysts Group (VCats) has once again emerged a leader in its category in 2020 despite the COVID19 pandemic. The Mumbai-based investment firm, which runs an incubator and a SEBI registered accelerator fund 9Unicorns, made the highest number of deals at 102 this year, compared to 63 a year ago.
VCats, which is focused on strengthening the start-up ecosystem in the smaller Indian towns, has invested over Rs 700 crore through a syndication in several idea-stage and early stage businesses across sectors this year, vis-à-vis Rs 500 crore in 2019.
Some of the co-investors that were a part of the syndication included—Sequoia Surge, Anicut, DSG Consumer Partners, Nexus Venture Partners, Facebook FB Start, Lightspeed Venture Partners India, Matrix Partners India, Titan Capital (Rohit Bansal and Kunal Bahl), Pankaj Chaddah of Zomato, Sanjiv Bajaj, SOSV, Pravin Jadhav, Lalit Keshre and many other well-known names.
According to data sourced from leading global research firms —Tracxn and Crunchbase, VCats has surpassed early stage or idea stage investment firms such as AngelList India, LetsVenture, Mumbai Angels and Blume Venture in every other parameters associated with start-up investing right from funding to exits.
|Only India Investors||No. of deals||Avg. Investment||Avg Round Size|
|Venture Catalysts & 9Unicorns||102||$500K||$1Mn|
|Indian Angel Network||7||$300K||$500K|
Source – Tracxn, Crunchbase
At a time when the Covid19 triggered economic crisis adversely hit the start-up ecosystem with several top investors tightening their purses, VCats continued with its mission to support the budding entrepreneurs. Not only in India, the investment firm, founded by Dr Apoorva Ranjan Sharma, Anil Jain, Anuj Golecha and Gaurav Jain in 2016, has also created an investor base for investing in several global start-ups based in the US, UK and Middle East markets.
For the second consecutive year, the firm has also made it to the list of top 10 global most active accelerators and incubators. It is now at third position behind players –YCombinator and Techstars and has surpassed popular accelerators such as Plug&Play, 500 Startups, SOSV and Antler Global in terms of number of deals done.
US-based YCombinator led the pack at 379 deals as on December 12, 2020.
|Incubator & Investor||No. of deals||Avg. Investment|
|Venture Catalysts Group||102||$500K|
|Global Founders Capital||78||$1Mn|
|Plug & Play||46||$200K|
Source – Tracxn, Crunchbase, As on 12.12.2020
On attaining the pole position in India and also making it to the third position globally, Dr Apoorva Ranjan Sharma, Co-Founder and President, Venture Catalysts Group stated, “While several investment firms in India and abroad, witnessed a slower funding activity in 2020, we continued growing. As a founder-friendly investor, we believe that adversity brings several opportunities along with it. In fact, we were able to scout many innovative and good start-ups at right valuations and were fortunate to back these promising start-ups.”
He further added, “Another important factor responsible for our growth was that the Indian start-up ecosystem grew faster than other developed economies on the back of strong government support and rising consumer demand for home-grown products and solutions. The pandemic has set in new world order and given rise to different new sectors and we see an opportunity in this new normal.”
On the front of exits as well, 2020 seemed to have been a good year for VCats. The firm witnessed a 33.3% increase in the number of cumulative exits and liquidity events at 36 deals in 2020 indicating that late-stage investment activity valuations remained unaffected during the year despite the socio-economic crisis.
The investor typically invests from USD 100k up to USD 1.5 million in early-stage and idea-stage start-ups, invested in companies such as BluSmart, ChargeZone, Dukaan, Raskik Mitron TV, FreightBro, GetVantage, Pariksha, Prescinto, Resolve AI, Toch, Zingbus, RoundLabs, and Stage amongst others. DeepTech, B2B Saas, FinTech, InsureTech, F&B, HealthTech, Media dominated the investments this year.
With a strong and robust network of over 5000 angel investors across Tier-2 and Tier-3 cities, VCats has been an early backer at some very successful startups such as BharatPe, SuprDaily, Beardo, Coutloot, Fynd and Blowhorn. In less than five years, the firm’s overall portfolio investments have reached a total valuation in the excess of USD 1.2 billion.
In 2021, Dr Sharma expects the firm to continue investing in sectors such as FinTech, Edutech, agritech, FMCG, eCommerce, logistics and supply chain management. It is also bullish on deeptech such as AI and Data Analytics as businesses across sectors are going digital even with physical distancing becoming the new normal.
Also, this year VCats has aggressively expanded its domestic and global footprints to over 33 Indian cities and nine countries respectively. The firm, which is pioneering entrepreneurship in Bharat or India beyond the top 10 metros, aims to have its presence in over 100 start-up cities and towns in the country on the back of rapid reforms undertaken by the Government to create more smart cities.
“There is a massive digitalisation revolution happening in the country at present. While the Government has a major role to play, private sector players and large conglomerates are also helping make India the world’s largest startup ecosystem. For example, the Rs 5000 crore startup fund and launched by Reliance Jio to foster foster ‘businesses of future’ will give a major boost for entrepreneurship in small Indian towns. Besides, with affordable data and strong broadband services, Jio is already expanding the enterprise sector. These developments give us enough encouragement and we expect to invest around Rs 1000 crore in the coming year and double the number of deals. We expect the growth coming in from small B and C towns of India,” Dr Sharma added.
In August this year, Oyo’s founder Ritesh Agarwal joined hands with VCats as an advisor and mentor to support India’s growing start-up ecosystem. Agarwal will work with the incubator to promote entrepreneurship across the country’s tier 1, 2 and 3 cities and help India become ‘atma nirbhar’ (self-reliant).